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  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] Snapping Up Huge Chunks of Farmland in the Developing World
  • Date: Thu, 13 Aug 2009 12:57:21 -0600



Why Corporations, Emerging Powers and Petro-States Are Snapping Up Huge
Chunks of Farmland in the Developing World
http://www.alternet.org/environment/141734/why_corporations%2C_emerging_powers_and_petro-states_are_snapping_up_huge_chunks_of_farmland_in_the_developing_world/?page=entire
By Scott Thill, AlterNet. Posted August 11, 2009.

In the past six months, big players in the global economy have grabbed 50
million acres of arable land, from Africa to Southeast Asia.


Stop me if you think you've heard this one before:

Investment banks, sovereign wealth funds and other barely regulated financial
entities in search of fat paydays go on buying binges structurally adjusted
to maximize their earnings reports and employee bonuses, while simultaneously
screwing their business associates and everyone else in the process. It's all
done in near-total secrecy, and by the time everyone finds out about it,
they're already in the poorhouse.

That's more or less the playbook for the derivatives and credit-default swaps
gold rush that ruined the global economy, which cratered in 2007 and has yet
to recuperate.

The bubble money has now moved on from housing and turned to the commodities
markets, especially global food production. Given what that money did to the
housing market, things don't look good for local communities whose land is
being bought up by governments, sovereign wealth and hedge funds, and other
investors on the hunt for real value in a hyperreal economy.

Entrenched and developing economic powers -- the U.K., China, South Korea,
India and more -- have launched land rushes to outsource production of
everything from staples like rice, wheat, corn and sugar to finance bubbles
like biofuels. That includes oil-wealthy Gulf States, which recently feasted
on commodities speculation that exploded oil prices in 2008.

The hard numbers are alarming: According to the Guardian, in the last six
months over 20 million hectares (around 50 million acres) of arable land,
mostly in Africa and Southeast Asia, have been sold or negotiated for sale or
lease. That's about half the size of all arable land in Europe, or the size
of entire U.S. states North Dakota or Oklahoma.

The aptly titled report, " 'Land Grabbing' by Foreign Investors in Developing
Countries," from the International Food Policy Research Institute, which
declined to be interviewed for this article, explains that "details about the
status of the deals, the size of land purchased or leased, and the amount
invested are often still murky."

It's no wonder: The economic valuation of land and water has increased in
concurrence with both price commodities and the ravages of climate change,
whose droughts, wildfires and other extreme environmental events are quickly
shrinking what's left of the planet's arable land and clean water.

That exponential process will only be intensified by the biofuels some of
these lands will be used to grow, which is a particularly shameless insult.
Rather than use the 2.8 million hectares China bought from the Congo -- or
the tens of thousands of hectares the U.K. bought from Ethiopia, Mozambique
and Tanzania, and so on -- to feed the hungry, those investor nations will
use them to grow food for our cars. What biofuels will do is make a few
outsider nations very rich at the expense of a great many locals who could
use the land to feed themselves.

But don't call it a land grab, cautioned Rodney Cooke, technical advisory
division director of the International Fund for Agricultural Development
(IFAD), who, along with the United Nations' Food and Agriculture Organization
(FAO), also declined to comment on this article, commissioned a study from
the International Institute for Environment and Development (IIED) to analyze
the disturbing trend. "I would avoid the blanket term 'land-grabbing,' "
Cooke said. "Done the right way, these deals can bring benefits for all
parties and be a tool for development."

Keep dreaming, argued Patrick Woodall, research director for Food and Water
Watch.

"These investments are effectively land grabs for a number of reasons," he
told AlterNet by phone. "They're going to be used to grow crops for exports.
They're taking arable land out of the domestic food supply. Most of these
deals are totally secret, and there are no standards of access to public
information. We're also concerned about places with weak legal systems, where
farmers and pastoralists won't even know these lands are being sold from
beneath them. Some don't even have formal land-titling systems, so this is
going to push people off the land and take away their access to food."

It already has, said the FAO's Trade and Market division representative David
Hallam, using the kind of maddening opacity made legendary by economists and
other hedging professionals.

"There are economic, political, social and ethical concerns surrounding these
investments. The record of foreign direct investment in agriculture over the
years does, unfortunately, suggest that many of those concerns are
well-founded. A review of the literature on the impacts of foreign direct
investment in agriculture leaves us with some unease, and at least not a
conviction that there are definitely positive effects to be had."

Of course, these diluted revelations didn't stop Hallam from blaming the host
countries for its investment partners' shock-doctrine policies. "Most of the
onus of actions to attract investment and to make sure it meets the
requirements of developing countries," he concluded in a speech to the
Woodrow Wilson Institute, "falls very much on the developing countries, on
the host countries rather than the investing countries. It's not so much to
say no to these investments perhaps, but rather to make sure that the policy
and legislative framework is in place to maximize the benefits and minimize
the risk."

"That's obviously misguided policy prescription," Woodall countered. "The
local leadership are usually not interested in cutting good deals for the
people who are actually living on the land, so these questions should be
dealt with openly. But that is just not always the case. There's no reason to
expect the investment houses that have brought down the global economy to
treat countries in the developing world fairly."

But all of this is prologue. This type of opportunist land-grabbing is not
new, nor has its recent escalation gone unnoticed by those with a healthy
sense of reality. Ever since the housing bubble popped under the weight of
political corruption, financial crime and environmental destabilization, the
smart money had its eye firmly on more earthbound commodities.

The serious questions worth asking arise after the ink has dried on its
secretive contracts: What happens when global warming really takes hold and
starving locals get tired of watching their homegrown food and fuel leave
their borders? Whose army will enforce these contracts, once they are
rendered moot by uprisings and internecine warfare?

The answer is: the same thing that's happening already, just on a much, much
larger scale.

"This is already causing a lot of political upheaval," Woodall said. "The
government of Madagascar fell recently because of public fury over of a land
deal with South Korea's Daewoo Logistics," which would have given the
investor over a million hectares, roughly half the size of Belgium, for
literally nothing. "China's deal with the Philippines also got scotched
because of resistance. The problem is that most people don't know these deals
exist."

"We are not against the idea of working with investors," Madagascar's new
president Andry Rajoelina explained, after being installed by the military
and a constitutional court months after violent protests chased his
predecessor, Marc Ravalomanana, out of Iavoloha Palace to an undisclosed
location. "But if we want to sell or rent out land, we have to change the
constitution, you have to consult the people."

Involving people, especially the poor, in deals that sell arable land from
underneath them just isn't in the investment playbook. After all, even the
$700 billion doled out by ex-U.S. Treasury Secretary and ex-Goldman Sachs CEO
Hank Paulson is practically impossible to track, on purpose. And that's
America handing out American money to American banks.

So what cutthroat land-grabber in his or her right mind, which is focused
like a laser on maximum profit by any means necessary, is going to clue in a
bunch of poor farmers, who already have little recourse, to food-rush schemes
designed to lock down production and pricing for richer countries half a
world away?

For its part, the FAO believes that some kind of binding global code of
conduct is a possible solution, but it admits that such a possibility is
closer to fantasy than reality.

"Its enforcement is likely to be problematic," the FAO said in a somewhat
laughable policy brief called 'From Land Grab to Win-Win.' "It might
nevertheless offer a framework to which national regulations could refer,
especially if parties realize that compliance with common standards is in
their mutual self interest."

But it never is, which is why these deals are made in the first place. To be
brutally honest, mutual interest is the opposite of what investor countries
are looking for, which is a one-sided interest arrangement in which
already-rich nations and investors, lost in a haze of wasteful consumption
and economic and political corruption, hopscotch the world in search of naive
hosts to feed upon. And whether it is rice or sugar cane or palm oil or other
fuels for their bloated bodies or cars, they are not invested, literally, in
the health and well-being of those hosts. They are survivalists in the purest
sense, and survivors just don't share when they can hoard.

"Investors are looking at this as scarce land and water in a world of
increasing scarcity," Woodall argued, "which is one reason they are pursuing
it so actively. They're bringing the plantation mentality to the 21st century
and driving people off their land. This is crazy stuff. If the deals that
people know about are as big as North Dakota, what does that say about the
deals they don't know about?"




  • [Livingontheland] Snapping Up Huge Chunks of Farmland in the Developing World, Tradingpost, 08/13/2009

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